Grub install failed when installing from USB to 16GB USB ext2 "/" (no swap)

Ubuntu Studio 12.04.1 AMD64

Installing from 16GB Fat32 USB w/ 4GB persistence created with Linux Live USB Creator.

Installing to 16GB USB formatted ext2 used as "/" (no swap, no other partitions, 1MB unallocated)

Ubiquity reports: Title: "Unable to install grub." Error: "Executing 'grub-install /dev/sda' failed. This is a fatal error."

ProblemType: Bug
DistroRelease: Ubuntu 12.04
Package: ubiquity 2.10.20
ProcVersionSignature: Ubuntu 3.2.0-23.31-lowlatency 3.2.14
Uname: Linux 3.2.0-23-lowlatency x86_64
ApportVersion: 2.0.1-0ubuntu12
Architecture: amd64
CasperVersion: 1.315
Date: Thu Oct 25 20:49:12 2012
InstallCmdLine: bootkbd=us console-setup/layoutcode=en_US console-setup/variantcode=nodeadkeys locale=us_us persistent noprompt cdrom-detect/try-usb=true file=/cdrom/preseed/ubuntustudio.seed boot=casper initrd=/casper/initrd.lz splash --
LiveMediaBuild: Ubuntu-Studio 12.04.1 "Precise Pangolin" - Release amd64 (20120818)
ProcEnviron:
 LANGUAGE=en_US.UTF-8
 TERM=unknown
 PATH=(custom, no user)
 LANG=en_US.UTF-8
 SHELL=/bin/bash
SourcePackage: grub-installer
UpgradeStatus: No upgrade log present (probably fresh install)